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Hermiston to Finally Get Power Plant Built by Chris Mulick Tri-City Herald, August 25, 2000

A California company has started construction on the long-awaited Hermiston Power Project, which will produce enough electricity to serve Spokane.

Calpine Corp. has scheduled a ground-breaking ceremony today for the $270 million power plant, adjacent to the J.R. Simplot potato processing plant on Simplot Road.

Already, crews have been stripping topsoil and excavating a site for the project's administration building.

The energy thirsty Northwest has seen a bevy of power plant announcements and proposals during the past several years, but few have started construction.

Ida-West, one of the first developers for the Hermiston Power Project, never began work, although it had announced multiple ground-breaking dates before selling the 540-megawatt project to Calpine.

Calpine assures this time it's for real.

"It's happening," company spokeswoman Katherine Potter said. "We're not just having a little ribbon cutting."

The development is significant because the project will be one of the first built in the Northwest by a so-called independent power producer, companies that have no affiliation with any utility.

It's these companies that power planners are counting on to build new generating stations to bail the Northwest and the entire West Coast out of an energy crisis.

Electricity demand has been creeping up on supply in recent years, and no new plants have been built. The situation has worsened this summer as California energy alerts have become routine.

In the Northwest, dam operators have interrupted spill operations for fish so more water could be used to generate electricity.

And the Northwest's demand peaks during the winter months are still ahead.

"We are on the cusp of a power emergency," said Judi Johansen, administrator for the Bonneville Power Administration, during a stop in the Tri-Cities this week.

The new Hermiston plant is scheduled to begin operation in the summer of 2002. Initially, all its power will be sold directly to spot and short-term markets, which have seen prices spike since May.

Thanks to newly installed price caps, peak prices in the California Power Exchange have been limited to some 12 times what is normal on the day-ahead market.

Calpine, which also markets natural gas, expects two-thirds of the plant's operating costs will go toward acquiring fuel. Hermiston, which is also home to another gas-fired plant operated by PG&E Corp., is considered a favorable site for power plants because of easy access to natural gas and electricity transmission lines.

About 250 to 300 workers will be employed at the plant during peak construction, and about 25 during operation, Potter said.

Calpine has interest in projects in 27 states. It operates 29 gas-fired power plants and 19 geothermal power plants. It has announced intention to build another 28 plants.

The company bought the project, which has been in the works for eight years, from Ida-West earlier this year.